AFRM Plunges Despite Beating Expectations – Here’s What Traders Need to Know

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•  06 Feb 2026
 

•   AFRM  
   
  -1.25%

$AFRM lost about 6% after reporting strong Q2 results, surprising analysts across the board. Revenue came in at $1.12 billion versus the expected $1.06 billion, GMV (gross merchandise volume) surged 36% to $13.8 billion, and EPS hit $0.16 while analysts had predicted a $0.01 loss. On paper, these are excellent numbers, yet the stock still fell.

The decline stems from investor concerns about slowing growth in the second half of the year. A key factor is the gradual exit of Walmart from Affirm’s platform, which affected quarterly numbers. However, when adjusting for Walmart’s departure, the underlying business remained solid. The market reaction is less about weak demand and more about uncertainty around changes in key partnerships.

Affirm is actively building new growth engines to offset partner shifts. Its new credit card has doubled transaction volume to $2.2 billion, and the number of cardholders rose to 3.7 million from 2.8 million in the previous quarter. The card enables in-store purchases, expands the BNPL (buy now, pay later) model, and includes 0% interest loan offerings, which are increasingly popular with consumers. This strategy reduces dependence on a few large retail partners and strengthens direct relationships with users. New partnerships, including Klarna, further diversify revenue streams.

Despite the short-term volatility, Affirm raised its annual guidance to a projected GMV of $28–28.6 billion and revenues of $2.27–2.3 billion. These figures signal sustained growth in the core business. The market’s sharp reaction reflects broader pressure on fintech stocks amid high interest rates and contracting valuation multiples. Traders are quick to react to any potential slowdown, which explains why $AFRM’s strong results were met with a selloff.

For investors, the key takeaway is that Affirm is executing its growth strategy successfully, even as the market struggles to parse changes in partnerships. Long-term prospects remain positive, especially as new payment products and partnerships take hold, strengthening the company’s direct-to-consumer footprint.

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